Has Maritz stepped down, across or up?

18 Jul 2012

This week’s executive reshuffle at VMware and EMC moves all the key candidates for the EMC top job into positions where they must prove themselves.

Reports that Paul Maritz was to step down from his role as CEO of virtualisation specialist VMware began circulating on Monday 16 July, but it was another 24 hours before EMC, which owns 79 percent of VMware, confirmed the move.

Contrary to early reports that Maritz had been ‘ousted’, however, it now looks more like a step across than a step down for him. From September 1, he will assume the role of chief strategist at EMC, reporting directly to CEO Joe Tucci.

“Paul Maritz is one of the brightest minds in the IT industry. He has created a compelling and lasting vision that has transformed VMware from a technology leader in virtualisation to a category leader in cloud computing,” said Tucci. “Paul leaves VMware in an unenviable strategic position and in great financial health. We are delighted to have Paul join the leadership team at EMC and look forward to working with him as he leads our technology strategy and directs our efforts on Big Data and emerging applications.”

Glowing praise indeed – and industry watchers are already speculating that the move may lead to a step up for Maritz, putting him in line for the top job at EMC. Sixty-four year old Tucci has spoken many times since 2009 about retiring as CEO, although more recently, he has said he will stay until the end of 2013, at which time he expects be succeeded by an internal candidate.

Maritz certainly has the background and experience for the role: born in Zimbabwe, educated in South Africa and with research work at the University of St Andrews under his belt, he moved to Silicon Valley in 1981 to join Intel. After five years at the semiconductor company, he joined Microsoft and rose to the number three position in the company before leaving in 2000. He was appointed CEO of VMware in 2008, after EMC acquired the company he founded, PI Corp, in 2003.

That said, another possible scenario is being discussed in the technology press: that EMC might put Maritz in charge of Cloud Foundry, VMware’s platform-as-a-service (PaaS) offering. It has been speculated that Cloud Foundry will be spun out of VMware, to become a wholly owned subsidiary of EMC.

Whatever happens next, Maritz’s job at VMware will be taken by Pat Gelsinger, currently EMC president and chief operating officer of information infrastructure products. He is now charged with the task of orchestrating VMware’s push beyond server virtualisation into other areas of IT infrastructure, such as storage, security and networking.

EMC chief financial officer David Goulden, meanwhile, is promoted to president and chief operating officer of EMC, whilst retaining the CFO role.

The changes, along with some sales force changes announced last week “are the most visible steps yet in our long-standing executive succession plan,” Tucci said in an internal email to employees, obtained by news service Bloomsberg.

So, in fact, the whole situation seems more amicable and mutual than initial reports suggested. On a conference call with financial analysts, Tucci described how EMC’s board held discussions earlier in 2012 about how to best expand VMware’s lead in virtualisation software into areas such as cloud and storage. At that time, Maritz said he felt it was time to hand the reins at VMware to a new CEO, and suggested Gelsinger, who he knows from the pair’s days at Intel in the 1980s.

It’s still not clear who the next CEO of EMC will be, but the most likely candidates are now clearly lined up. All have much to prove over the next year or so.